Inventing Bitcoin Summary
Inside Out: Money As A System Of Control
Inventing Bitcoin by Yan Pritzker is my favorite high-level technical summary of bitcoin that the average person can understand. Yan gives a concise, less than 100 word, breakdown of how bitcoin is technically sound, what problems it solves (Byzantines General Problem), and a sweeping overview of it’s functions & uses. Never thought a Bitcoin book could be so small yet pack such a powerful punch.
Inventing Bitcoin Quotes
“Banks are just ledgers”
“Cracking the encryption of bitcoin would be like properly guessing the location of a single atom in the universe”
“Bitcoin mining is repeatedly “rolling the dice” until you hit the right number. “
-- Yan Pritzker
Inventing Bitcoin Lessons
- Now that money is primarily digital it inherently got centralized
- The 2017 Equifax hack was a direct result of centralizing data
- Fiat, in Latin, means “let it be done” or “by decree”
- In Venezuela in 2009 the exchange rate was 1:2 for bolivar to USD, in 2019 it was 1:250,000
- Bitcoin wasn’t invented in a vacuum, it pulled upon decades of inventions in computer science & cryptography specifically, Wei Dai’s b-money, Adam Back’s Hashcash, and Proof of Work
- As many atoms in the universe as there are possible hashes. In other words, breaking it would be like guessing the exact location of one atom in the entire universe
- A single block is: a group of transactions + nonce + PoW hash
- Hash rate is the number of hashes per second of all the miners
- Block rewards for miners started at 50 BTC per block, then got cut in half every four years per Satoshi’s design
- UTXOs allow for easy and efficient validation of double-spending
- Two types of forks exist: soft forks & hard forks
- Every blockchain competitor either centralize by trying to move too fast or moves too slow and can’t accumulate the hash power to compete
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